Stimulus Dollars Begin to Flow: Here’s How, Where and When

The U.S. Department of Energy (DOE) continues to announce more places where stimulus money is to be spent as more funding from the American Recovery and Reinvestment Act of 2009 is allocated.

The DOE Web site has links for funding opportunities offered through the stimulus. Directly, the DOE plans to distribute money via grants, contracts and cooperative agreements through a bidding process. Applications on renewable energy projects, advanced fossil energy projects, Smart Grid projects and others will be considered.

Timelines for funding will be available depending on the specific program and project, according to the DOE. Funding will be provided in an indirect fashion through state and local governments, which will administer several energy block grant programs.

The Obama administration also announced US $3.2 billion in funding for local energy efficiency programs in U.S. cities, counties, states, territories and Native American tribes. The Energy Efficiency and Conservation Block Grant Program has the goal of reducing demand for electricity, increasing efficiency and reducing fossil fuel emissions.

You can download a state-by-state breakdown of the grant funding for state-level energy programs and weatherization assistance for low-income persons.

David Walls, director of Navigant Consulting, said the block grant programs will be one of the first programs to direct money where it is needed.

“Those are probably some of the earliest funding opportunities that will become available. Some of the larger grants, based on the complexity of the projects, will not go out until later,” Walls said.

Some of the larger, more complicated programs, such as those that allot money for research and development programs, could take much more time before dollars actually get distributed and spent.

“There’s a whole sequence of events that has to take place. You have to announce the funding opportunity so people can, based on those requirements, submit their proposals. Then there will be an application review process,” Walls said.

Some of the money for these kinds of programs might not be released until as late as 2010, he said.

Loan Approval

Greg Jenner, partner with Stoel Rives, said the DOE will have to go through a rulemaking process to establish the criteria for the loan guarantee program

“It will take some time. It’s cumbersome.” Jenner said.

A timeline for the approval and distribution of these loan guarantees is not yet clear, he said.

“The Treasury Department (which administers the program) has never done anything like this program before. They have only recently decided where the program will be housed in treasury and they have just figured that out,” he said.

However, the approval of some older applications, such as the $535 guarantee offered to California-based solar power firm Solyndra, Inc., are signs that the process may become more streamlined.

Jenner said his clients are hoping that the circulation of these loan guarantees will be more rapid than they have been under past energy secretaries and past loan programs.

“(Energy Secretary Steven Chu) is making all the right noises when it comes to getting this program working quickly and getting the guarantees approved,” he said.

The DOE’s loan guarantee program awards guaranteed private sector loans for energy projects using an amendment to the 2005 Energy Policy Act. To qualify, projects must commence construction no later than Sept. 30, 2011.

Through the stimulus act, the DOE can underwrite up to $60 billion in loans with its Innovative Technologies Loan Guarantee program. Loans are offered to qualifying projects in the following sectors: biomass, hydrogen, solar, wind, hydropower, advanced coal energy, carbon capture and sequestration, pollution control and others. Companies can apply for the loan guarantee program online.

Tax Credit Technicalities

Jenner also said that the stimulus act’s establishment of the option to choose a grant rather than the Investment Tax Credit may be moving more slowly than it did at first, after running into some legal technicalities.

There is a question of whether the Treasury Department, which administers the program, has to determine compliance with existing laws such as the Environmental Policy Act or the Endangered Species Act, among others, he said.

“There are lawyers who believe very strongly that compliance is not required. It’s just some funny language in the statue. Treasury is now working on that,” he said.

If compliance with such laws is found to be a requirement, he said, it would negatively impact the program.

“It would mean the death of the grant program if it is concluded that compliance is required and must be shown,” he said.

Smart Transmission

A consortium of state and federal regulators, sponsored by the Federal Energy Regulatory Commission and the National Association of Regulatory Utility Commissioners released a set of criteria for how they think the DOE should consider when distributing the $4.5 billion allocated through the stimulus act for Smart Grid and related transmission programs.

The list suggests that DOE should require smart grid grant applicants to show how the project will provide for interoperability in the absence of approved standards, address cyber security concerns and maintain the grid integrity.

It also says DOE’s criteria should state that grant-funded projects should focus on both the transmission and distribution system and include a range of technologies — not just meter installation. Walls said the DOE should be releasing details shortly on funding opportunities involving the Smart Grid and transmission upgrades portion of the stimulus act.

“There’s going to be a notice of intent issued by DOE that will identify specific details,” Walls said.

Energy Efficiency a Priority

A total of $16.8 billion is going to the DOE’s Energy Efficiency and Renewable Energy office, a near tenfold increase from the office’s 2008 funding level.

The majority of this money will be used for direct grants and rebates for energy efficiency measures and installation of renewable applications, there is also funding for utility-scale biomass projects ($800 million) and the development of geothermal energy technology ($400 million).

The stimulus act also directs $2 billion in EERE funds for the development of advanced battery systems and components in the U.S. to support advanced lithium-ion batteries and hybrid electric systems.

The vast majority of advanced batteries used in the U.S. are manufactured in Asia. New technologies in advanced batteries could have a wide-ranging impact on the generation sector, particularly with regard to renewable energy storage.

Fossil energy

There is $3.4 billion in the stimulus act for fossil energy research and development. This figure includes $1.52 billion for industrial carbon capture and energy efficiency improvement projects, including money for research on the beneficial reuse of carbon dioxide.

Also included are $50 million to identify geological formations that could be used for carbon sequestration and $20 million for geologic carbon sequestration training and research grants.

Several projects are lobbying for this money already. Texas lawmakers asked the DOE March 25 to send up to $1.2 billion in funding to help build a 345 MW coal-fired carbon capture project proposed by Summit Power. The 275 MW FutureGen project, planned for Illinois, is also seeking stimulus money to fund most of its projected $1.8 billion cost.

Blinding Them With Science

The DOE also announced $1.2 billion in new science funding through the stimulus act, spearheaded through the country’s network of government-funded laboratories and the DOE Office of Science.

Research dollars that could benefit the power generation sector include:

$150 million for the National Synchrotron Light Source-II at Brookhaven National Laboratory in New York State. This high intensity light source could lead to advances in energy storage technology and solar photovoltaics.

$227 million for Energy Frontier Research Centers. These centers will pursue research in fields ranging from solar energy to nuclear energy systems, biofuels, geological sequestration of carbon dioxide, clean and efficient combustion, solid state lighting, superconductivity, hydrogen research, electrical energy storage, catalysis for energy and materials under extreme conditions.

The $1.2 billion is the first installment of a total of $1.6 billion allocated to the DOE Office of Science by Congress under the stimulus legislation. Another $371 million in science funding has yet to be detailed.

Jeff Postelwait is the online editor at Power Engineering. In that capacity, he manages news content for Power Engineering’s website and edits the magazine’s weekly electronic newsletter. He is based in Tulsa, Oklahoma.

This article was originally published by Power Engineering and was reprinted with permission.

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